It is imperative to work with the right electricity retailer for your electricity supply. After all, you won’t want to be tied down by a contract that annoys you throughout the entire period. With this purpose in mind, here are five things you should look out for.

Table of Contents:

1. Types of Plans Available
2. Fees and Charges
3. Contract Period and Renewal Terms
4. Additional Perks and Benefits
5. Convenience and Customer Service
6. Conclusion

One Minute Summary:

• Firstly, there are five types of plans that you can choose for your electricity supply. Choose one that fits into your needs.
• It is important to realise that not all electricity retailers display their fees and charges transparently. Hence, I have created a checklist for you.
• Unless you love that plan so much, otherwise you should review the contract when it is due for renewal.
• A one-time bill rebate shouldn’t be the most compelling reason on why you choose that electricity plan.
• Do not underestimate the importance of convenience (via indirect billing) and good customer service.

Part 1: Types of Plans Available

To begin with, let’s understand the selection of plans available on the open electricity market. This helps you to choose the plan that fits into your profile.

Part 1.1: Prevailing Electricity Tariff by SP Group

Obviously, you can choose to remain status quo with SP Group. This means that you will pay the prevailing electricity rate and this will be adjusted each quarter.

Part 1.2: Standard Fixed Price Plan

To illustrate, the electricity retailer will charge a fixed electricity rate in a standard fixed price plan. Under those circumstances, you will pay the same rate throughout the contract duration. Such plans are suitable for consumers who prefer more certainty in their monthly electricity bill.

Part 1.3: Standard Discount off the Regulated Tariff Plan

On the other hand, the electricity retailer may offer a fixed discount off the prevailing electricity tariff. To sum up, you will enjoy some savings from the current electricity tariff. You may consider such plans when you are unsure of the electricity tariff’s direction. Despite that, you still want to enjoy some savings (as compared to the prevailing electricity tariff).

Part 1.4: Non-Standard Price Plan

There are plans which don’t follow the standard pricing model (i.e. in Part 1.1, and Part 1.2). For example, some plans set the rates according to the time of the day. Hence, you will need to know your consumption pattern to maximise its value.

Part 1.5: Wholesale Electricity

Lastly, you may buy electricity at wholesale prices. As a matter of fact, all the electricity retailers will buy electricity at this rate as well. In this case, you will bear the risk of huge spike in electricity prices at any given half hour. This may be balanced against the savings that you may get in return.

Part 2: Fees and Charges

We want to avoid or to pay as little fees as possible. I have listed some common fees and charges to look out for:

• Early Termination: A flat fee or a formulated rate if you terminate your contract early.
• Security Deposit: Some electricity retailers may collect an additional deposit in case you disappear.
• Service Fee: You may be charged a monthly fee throughout the contract duration.
• Transmission Loss Factor: Some of the plans charge a fee for this factor.
• Payment Rejection: For automatic payment arrangements, e.g. via GIRO, debit, or credit card, a fee may be imposed if the transaction fails.
• Late Payment: Either a flat fee or a percentage of the outstanding bill amount.
• Changes to the Contract: If you change your mind after signing up, then you will be slapped with a fee.
• Paper Bill: Some plans provide e-bill only. In contrast, some plans force you to pay a fee for the paper bill. What’s more, an additional fee may apply when you request for an old bill, or to reprint one.

Part 3: Contract Period and Renewal Terms

Before you make the switch, it will be good to know how to get out of it. For instance, you may receive a better offer from another retailer. In contrast, it may be because of that horrifying customer service experience that you have encountered.

Part 3.1: Contract Period

In short, the contract period is the time when you are forced to stick with the same plan and the same electricity retailer. In the event that you terminate the contract early, you will need to pay a penalty (read Part 2). As a result, it makes sense to do your research and choose a plan with reasonable terms and service.

Based on my observation, I have noticed that the longer the contract period, the lesser the offered discount. In fact, I realised the same trend when I signed up with Ohm Energy back in 2019. Obviously, I went to find out why and this was their response, “The way we price our price plan is based on future prices. It doesn’t really mean that a longer contract will get a better rate”.

Accordingly, the higher price (from a longer contract) is used to hedge against a potential spike in the future electricity tariff. As a result, this becomes a point for consideration on whether you prefer

• to have certainty in the electricity rate in exchange for a longer lock-in period; or
• to enjoy more discount together with uncertainty in the short term.

Part 3.2: Renewal Terms

In general, most (if not all) of the plans will be renewed automatically at the end of the contract period. As an illustration, let’s assume that you have signed a two years contract. Two years later, your contract will be renewed for another two years automatically.

Meanwhile, it is important to realise that the renewal rates may not be the same as before. This is because the electricity retailer will offer the rates based on the prevailing electricity tariff then. Given that there is no assurance that this will remain as the better deal in the future, be sure to watch out for that automatic renewal!

Furthermore, some plans will offer attractive terms during the sign-up phase. However, you will get less than mediocre terms on renewal. Therefore, it pays to set a reminder to do a contract review in due time.

Part 4: Additional Perks and Benefits

Who doesn’t like additional perks and benefits? (Says no one.) In summary, these are the common benefits that an electricity retailer may provide.

• Additional Bill Rebate: After you continue the contract for a certain period of time, you may receive a one-time bill rebate.
• Referral Programme: Some plans include a one-time bill rebate for new sign-ups. Correspondingly, either or both the referrer and the referee will receive this rebate.
• Free Gifts: Some plans come with free insurance coverage for a fixed period of time. To point out, you may wish to consider how your personal data is being used for this purpose.
• Credit Card Promotion: When you charge the electricity bill to a specific credit card on a recurring basis, you may receive either a one-time bill rebate or an additional discount. However, you may need to fulfil the rest of the card’s requirement(s) in order to receive the reward. For example, it may be to meet the minimum card spending for the statement month.

Part 5: Convenience and Customer Service

Part 5.1: Direct Billing

Altogether, there are two methods to bill you for your electricity usage; either

1. Direct billing: This means that the electricity retailer will bill you directly for the electricity supply; whereas SP Group will send you a separate bill for other utilities, e.g. water and gas supply.
2. Indirect billing: Summing up, you will receive a single monthly bill from SP Group. This will cover the charges for the electricity supply (by the electricity retailer), and the charges for other utilities.

Part 5.2: Customer Service

Finally, customer service refers to how much the company values working with you. By and large, I value good customer service over price itself. This is because I prefer to know that my electricity contract is in good hands. Hence, this may become a point for your consideration as well. After all, you won’t want disputes (if any) to go cold or to be forced to pay suspicious charges without proper clarification.

Part 6: Conclusion

All in all, these five points serve as a guideline on what you can expect when choosing an electricity plan. While it is important to ‘get a good deal’, you must also know what entails behind it. In any case, do check out the comparison post that I have written to help you make a more informed decision today.

First Published: 19 June 2019
Last Updated: 4 February 2021